Ten Truths About Loan Modification (Part 2)

This is Part 2 of 10 Truths About Loan Modification. For Part 1 Scroll Down to the Prior Post.

6. Paying for loan modification is often unnecessary. If you computer freezes most computer users will try self-help by re-booting before bringing their computer to a technician. Homeowners should attempt to modify their mortgages themselves (for free) before hiring anybody to help them. Many loan modification companies call the same numbers available to consumers. Before hiring a private for profit loan modification company homeowners should explore non-profit companies that are local and usually have far more experience that Johnnie come lately loan modification companies that have jumped on the loan modification bank wagon. 7. Hiring an out of state loan modification company is about as stupid as lighting your money on fire. It was with sadness that I heard the story of a Brevard homeowner who will lose her home later this month to foreclosure sale. She hired a loan modification company in California and paid them $2,500.00 up front for loan modification. They never got her a loan modification. If they did nothing they would have hurt her less than they did. They also told her not to worry about the summons and foreclosure complaint that were delivered to her by process server. They told her “That is just a scare tactic, don’t worry about it.” She listened to them and ignored the strange papers that happened to be a foreclosure lawsuit. She ignored the case when the lender got a default. She thought a loan modification would save the day. She ignored the lenders motion for summary judgment. When she got the notice of sale it was pretty close to too late to save the home. The $2,500.00 she spent on “loan modification” was more than enough to hire a lawyer to stop the foreclosure. If you hire a local loan modification company under an agreement that you do not pay a dime unless and until you receive a loan modification at least you can stop by their office and ask to see your file and talk with them face-to-face. If they fail to keep their promises of change an illegal upfront fee you can demand your money back, sue them the county where you live, and report them to the Florida (or your states) Attorney General. If you hire an out of state company good luck ever getting your money back.

8. Hiring a loan modification company requires due diligence. Before you hire a loan modification company (to modify your loan) or a lawyer (to modify your loan, defend a foreclosure lawsuit, or sue the lender) you have to do your homework and ask tough questions. Start by looking the company up on google and consumer complaint boards. See if they are listed on the attorney general website or even Yelp! Ask the company for references and proof of the results they have obtained. Our firm has orders from cases where defeated lender motions for summary judgments. Our client’s identity is attorney-clients privileged but we can redact out our clients name with a marker and share the orders in person or send a scanned copy to a prospective client. We have satisfied clients whose homes we have saved who can give a reference over the phone to a prospective client. Hire a professional in your own state. Ask for a reference. Ask the reference what happened with their loan, how long did the process last, how much did the modification company or lawyer charge them, were there calls and E-mails returned, would they happy about the result would they recommend the company to a friend. If your house is a stake you should use the same care in choosing a lawyer as you would hiring a doctor or car mechanic. 9. There are alternatives to loan modification. If the bank is owned $250,000 on home worth $150,000 in a short sale on their best day the bank will receive $150,000 and usually less after real estate commissions. If the lender will take $150,000 on short sale but will not reduce the loan balance then short sell the house to somebody you know and trust and buy it back a year later. Perhaps you can rent the house in the meantime. A short re-fi is another alternative that many homeowners have never heard of. In a short re-fi the lender accepts a payoff in the amount of the value of the property and the source of funds is a new lender. The original lender cashes out of their loan, limits their losses and takes a non-performing loan off their books. The homeowner has a new mortgage from a new company and usually has a small amount of equity from day 1. Another variation of Short Re-Fi is where an investor buys the note from the lender for less then the current value of the home. The investor then enters a satisfaction of the first mortgage in exchange for the homeowner executing a new mortgage in favor of the investor for slightly less then the value of the property (but more than the amount the investor paid the original lender). The homeowner never moves out of their house or loses possession of the house. The first mortgage is recorded as paid off and the homeowners new mortgage has a loan balance much less than the old loan and is less than the value of the property. We work with Short- RE-FI companies that do NOT require excellent credit just steady income and employment and an owner occupied primary residence. (Florida homeowners seeking a free consultation about Short Re-Fi may E-mail: truthaboutloanmodification@gmail.com 10. Homeowners who fight their foreclosure get the best loan modifications. When somebody is pointing a gun at your head sometimes the best way to negotiate is to point a gun a theirs. When the bank tells a homeowner in foreclosure they do not need a lawyer there is a reason for it and the reason is that the bank does not want the homeowner to have a lawyer. If has been our experience that when a homeowner hires our firm or other skilled foreclosure litigator the foreclosure case will take three times as long, and the banks legal fees will likely quadruple. When the lenders lawyer can’t prove their case because they lost the note, the note was not properly endorsed, or the case as one of numerous other legal flaws banks get desperate. When a bank risks getting nothing the people in loss mitigation are no longer calling the shorts and a new team the banks legal team and lawyers are making the decision. After the bank has stumbled in Court is when real modifications occur. Remember banks make modifications not because they want to but because it is in their financial interest or because their lawyer tells them they have no other choice.